Hershey Co. is warning of an upcoming Halloween scare, announcing Thursday that it would not meet demand for this year’s trick-or-treating and Christmas holidays.
Like many manufacturers, Hershey has been hit by supply chain problems and the war in Ukraine, making ingredients such as cocoa, edible oil and other food ingredients hard to find.
“Seasonal consumer engagement is expected to remain high, and we expect high single-digit sales growth for both our Halloween and holiday seasons,”[ads1]; CEO Michele Buck said in the company’s second-quarter earnings call this week. “Despite this strong growth, we will not be able to fully meet consumer demand due to capacity constraints.”
HOME DEPOTS 12-FOOT SKELETON $300 IS BACK IN STOCK FOR HALLOWEEN
Hershey CEO Michele Buck said those issues, along with the company’s focus on meeting demand during non-holiday periods, would lead to a likely shortage during Halloween, but added that sales would still top last year.
The October Halloween holiday period is Hershey’s busiest time of year, accounting for about 10% of the company’s annual sales, as kids and their parents stock up on Twizzlers, Jolly Ranchers and Kit Kat bars.
VAMPIRE KILL KIT SELLS FOR $15,000 AT AUCTION
Still, shares of the Reese’s Peanut Butter Cup maker rose 2.5% in morning trade after the company lifted its earnings and sales forecasts, benefiting from price increases amid robust demand for chocolate and candy.
Hershey’s net sales rose over 19% to $2.37 billion in the quarter ended July 3, beating analysts’ estimates of $2.22 billion, according to IBES data from Refinitiv.
While Hershey expects more consumer pressure over higher prices in the second half of the year, the company is relying on price increases to boost growth.
The 128-year-old company raised its 2022 adjusted EPS growth forecast to 12% to 14%, from 10% to 12%. Hershey also said it now expects net sales to grow between 12% and 14%, compared to the 10% to 12% forecast previously.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
“Historically, Hershey’s sales growth has been driven by higher prices and not necessarily volume … The company enters this period from a position of strength with that expertise,” CFRA Research analyst Arun Sundaram said
Hershey Co. did not immediately respond to Fox News’ request for comment.
Reuters contributed to this report.